It seems like there’s one topic that we can’t escape lately – the recession. A few months ago, we talked about if we actually are in a recession. In 2023, the question still remains unanswered! Whether you believe we’re in a recession or not, one thing is very clear – small businesses are taking a hit. Costs of goods are rising, while wages remain the same. Therefore, people are only spending money on the bare necessities – which are not as cheap as they used to be. As a result, small businesses aren’t generating as much profit. Here are some tips to help your small business survive during a recession!
1. Start Cutting Unnecessary Expenses
Not sure where to start when trying to cut expenses? Begin by looking over your utility bills, especially your electricity bill. Start to think of more energy efficient products you could purchase that would lower these costs,for example LED lights. Look around your space for any unnecessary signs or lights you keep on 24/7.Turn them off immediately! Another major move to help your business survive during a recession is transitioning to an all-online business if possible. If you feel as though your employees could do their work virtually, this could save you tons of money on rent. If you’re thinking of transitioning into a hybrid model instead of fully remote, this will save you an average of $11,000 for every employee that works from home half the time.
2. Check Out Real Estate in Your Area
If you own a business that can’t move online, like a restaurant, car wash, landscaping service, etc., start looking at cheaper properties where you could move your business. Surviving the recession could mean downsizing the square footage of your business. Generally, the word “downsizing” has a negative connotation. However, downsizing has been a positive for many businesses, especially those that don’t utilize all of their space.
3. Negotiate With Your Suppliers
Cutting costs is the main way your business will survive during a recession. Call your suppliers and negotiate better deals, especially if you’re purchasing items in bulk. If you feel like you’re not getting the best deal, shop around! Reach out to other suppliers and see if you can strike a better deal with them. If your business is in a different realm, see if your suppliers will offer you a discount if you pay an invoice within 30 days. This incentive is used by many suppliers, so make sure you take advantage of it!
4. Try To Pay Back Any Outstanding Debts
As a business owner, you’ve invested a great amount of time, effort, and money into building your store, brand, products, etc. If you took out a loan for anything regarding your business, now is the time to get that payment down! Variable interest rates can skyrocket. During a recession, the banks will do anything to get as much out of you as possible – even if you have nothing. Even though a large payment right now may not seem feasible, this preventative measure will save you from being in major debt in the long run.
5. Don’t Panic!
Even when our financial situation can’t seem to get any worse, there’s always a solution! If you have a panicked mindset, change it into a positive, problem-solving mindset. It’s similar to taking a test and going in with an “I’m going to fail” attitude versus an “I’ve totally got this” attitude. Changing your mindset is the cheapest, easiest way to survive during a recession. As a business owner, having that “can-do” attitude will rub off on your employees. No matter how dire your financial situation may or may not be, it’s important to stay positive as those around you might give up as well.
We’re Here To Help Your Small Business!
At DeSantis, Kiefer, Shall & Sarcone, we understand that this time of uncertainty can come with unexpected financial troubles for your business. If you have any questions or concerns regarding a financial plan for your business, don’t hesitate to give us a call at (718)351-2233. We’re ready to help!
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